Global zinc short-term outlook January 2022

In January, the zinc price shrugged off the turmoil in equity markets and consolidated its position around $200/t higher. Meanwhile, in Europe we now expect the Portovesme and Auby smelters to be suspended for the first half of the year, with a risk that they will be shuttered for longer. The loss of this European refined zinc supply has resulted in spot zinc premiums surpassing the all time highs seen in 2006 and 2007. There is little chance of a respite from high premiums in the near-term. European smelter cutbacks may also be making themselves felt in the concentrate market where spot treatment charges have moved sharply higher. The shift higher comes after a late start to annual benchmark negotiations. A key question for negotiators will be whether the sudden move higher in spot TCs are heralding a sustained easing in the concentrate market or a temporary blip.